Principal Commissioner Of Income Tax-I, New Central Revenue Building, Statue Circle, Jaipur (Raj v. Shri Mahendra Rajnikant Zaveri, 2683, Suratwala Building, Msb Karasta, Johari Bazar, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 42 / 2018 Principal Commissioner of Income Tax-I, New Central Revenue Building, Statue Circle, Jaipur (Raj.) ----Appellant Versus Shri Mahendra Rajnikant Zaveri, 2683, Suratwala Building, MSB KaRasta, Johari Bazar, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Anuroop Singhi with Mr. Aditya Vijay _____________________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Order 13/03/2018 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby Tribunal has allowedthe appeal of the assessee. 2.Counsel for appellant has framed following substantial questions of law: i) Whether, the Tribunal was justified inholding that the assessee is entitled for thebenefit u/s 54F of the Act in ignorance of lawand fact as the mandatory deposit ofunutilized sale consideration in Capital GainDeposit Scheme has been allowed up to thedate of filing of return of income u/s 139(4),as against specific mention of Section 139(1)of the Act in Section 54F of the Act? ii) whether the Tribunal was justified in notconsidering the judgment of Hon'ble SupremeCourt and on the contrary relying upon theorder passed by the Tribunal, the facts ofwhich were also distinguishable? iii) Whether on the facts and circumstances ofthe case, the finding of the Tribunal is perverse, contrary to the record anduntenable in the eye of law?” 3.The above questions are no more res integra in view of decision of this Court inD.B. Income Tax Appeal No.153/2017, Principal Commissioner of Income Tax-I vs. Sh. Shankar Lal Saini decided on 19.12.2017 which reads asunder: 1. By way of this appeal, the appellant hasassailed the judgment and order of the tribunalwhereby tribunal has allowed the appeal of theassessee and modifying the order of CIT(A) aswell as AO. 2.This court while admitting the appeal on1.06.2017 framed following substantial questionof law:- “(i) Whether, the tribunal was justified inallowing the deduction of Rs.1,60,00,000/- u/s54B and Rs.52,00,000 u/s. 54F of the Act,ignoring the specific provisions of Section54B(2) and 54F(4) which refers to the due dateof Section 139(1) and not Section 139(4) of theAct?” 3.The facts of the case are that the assesseewas picked up for scrutiny assessment and theassessment was finalized under section 143(3)of the I.T. Act, 1961 (hereinafter referred to asthe Act) vide order dated 20.03.2014. Whileframing the assessment, the AO declined theclaim of deduction under sections 54B and 54Fof the Act on the ground that assessee has notdeposited the net sale consideration in thecapital gain account. 4.Counsel for the appellant Mr. Singhi hastaken us to the order of the AO wherein it hasbeen observed as under:- 5.5 I have gone through the submissionsmade by the assessee but the reply filed bythe assessee is not acceptable as assesseehas failed to deposit the amount of net saleconsideration or capital gain in capital gainaccount before due date of filing of returni.e. 31.07.2011 in the above case as perprovisions of section 139(1) of the I.T. Act, 1961. Assessee claimed that saleconsideration was deposited in nationalizedbank as well as capital gain account. Perusalof the documents submitted by the assesseeit is found that assessee has not filed anydocumentary evidence in this regard.Further, the assessee had claimed that valueof construction of house Rs.52,00,000/-including Rs.5,00,000/- in agriculture land.The contention of the assessee in this regardis also not found acceptable as deduction u/s54B has already been claimed by theassessee for Rs.1,60,00,000/- and same hasbeen discussed as above. Therefore,assessee is not entitled to claim thededuction of Rs.5,00,000/- u/s 54F. 1961. Assessee claimed that saleconsideration was deposited in nationalizedbank as well as capital gain account. Perusalof the documents submitted by the assesseeit is found that assessee has not filed anydocumentary evidence in this regard.Further, the assessee had claimed that valueof construction of house Rs.52,00,000/-including Rs.5,00,000/- in agriculture land.The contention of the assessee in this regardis also not found acceptable as deduction u/s54B has already been claimed by theassessee for Rs.1,60,00,000/- and same hasbeen discussed as above. Therefore,assessee is not entitled to claim thededuction of Rs.5,00,000/- u/s 54F. 6. In view of the above position issue ofboth the deductions claimed by the assesseeis decided separately as under:- The provisions of section 54B(2) reads as-under: “ The amount of the capital gain which is notutilized by the assessee for the purchase ofthe new asset before the date of furnishingthe return of income under section 139,shall be deposited by him before furnishingsuch return [such deposit being made in anycase not later than the due date applicablein the case section 139] in an accordancewith, any scheme which the centralGovernment may, by notification in theofficial Gazette, frame in this behalf andsuch return shall be accompanied by proofof such deposit; and, for the purposes ofsub-section (1), the amount, if any, alreadyutilized by the assessee for the purchase ofthe new asset together with the amount sodeposited shall be deemed to be the cost offthe new asset.” In view of above provisions of I.T. Act it isclear that assessee has to deposit theamount of capital gain which has not beenutilized by the assessee before due date offiling of return in capital gain accountscheme, 1988. Assessee has admitted thefact that he has failed to deposit the amountof Rs.1,60,00,000/- in capital gain accountbefore due date of filing of return u/s 139(1)of the I.T. Act. Therefore, the deductionclaimed by the assessee u/s 54BRs.1,60,00,000/- is not allowable to theassessee. In view of the above discussiondeduction claim by the assessee u/s 54BRs.1,60,00,000/- is disallowed and added tothe total income of the assessee. Penaltyproceedings u/s 271(1)(c) is being issued initiated for furnishing of inaccurateparticular of income. 7. The provisions of section 54F(4) reads as-under: “The amount of the net consideration whichis not appropriated by the assessee towardsthe purchase of the new asset made withinone year before the date on which thetransfer of the original asset took place, orwhich is not utilized by him for the purchaseor construction of the new asset before thedate of furnishing the return of incomeunder section 139, shall be deposited by himbefore furnishing such return [such depositbeing made in any case not later than thedue date applicable in the case of theassessee for furnishing the return of incomeunder sub-section (1) of section 139] in anaccount in any such bank or institution asmay be specified in, and utilized inaccordance with, any scheme which theCentral Government may, by notification inthe official Gazette, frame in this behalf andsuch return shall be accompanied by proofof such deposit; and, for the purpose of sub-section (1), the amount, if any alreadyutilized by the assessee for the purchase orconstruction of the new asset together withthe amount so deposited shall be deemed tobe the cost of the new asset.” In view of above provisions of I.T. Act it isclear that assessee has to deposit the netsale consideration amount which has notbeen utilized by the assessee before duedate of filing of return in Capital GainAccount Scheme, 1988. Assessee hasadmitted the fact that he has failed to depsitthe amount of Rs.52,00,000/- in capital gainaccount before due date of filing of returnu/s 139(1) of the I.T. Act. Therefore, thededuction claimed by the assessee u/s 54FRs.52,00,000/- is not allowable to theassessee. In view of the above discussiondeduction claim by the assessee u/s 54FRs.52,00,000/- is disallowed and added tothe total income of the assessee. Penaltyproceedings u/s 271(1)(c) is being issuedinitiated for furnishing of inaccurateparticulars of income. Subject to the above disussion, total incomeis computed as under:- (1) Income as disclosed in the return Rs.66,49,570/- Add: Addition as discussed in para-4 aboveRs.59,04,000/- Addition as discussed in para-6 above Rs.1,60,00,000/- Addition as discussed in - para-7 aboveRs.52,00,000/ Net taxable IncomeRs.3,37,53,570/- Assessed u/s 143(3) of the Income Tax Act,1961 at Rs.3,37,53,570/-. Calculation of Taxand interest charged u/s 234A, 234B and 234Cof the I.T. Act, 1961 has been shown in theenclosed ITNS-150 which is also a part of theassessment order, accordingly demand noticeand challan is issued. Penalty notice u/s 271(1)(c) is being issued for furnishing of inaccurateparticulars income. 5.Taking into consideration, he contendedthat the AO has assessed the income and capitalgain benefit was not rightly granted to theassessee. He further contended that CIT(A) hasdismissed the appeal observing as under:- (vii) It may be mentioned that in the case ofNandlal Sharma vs. ITO (Supra), the abovereferred decision of Hon’ble Supreme Courtwas not placed before the Hon’ble ITAT. Inview of the decision of the Apex Court in thecase of PN Khanna V/s CIT 2004 266 ITR1/135 Taxman 327 and the decision of theHon’ble Tribunal which has relied on thisdecision, I respectfully differ with thedecision of Hon’ble ITAT in the case ofNandlal Sharma vs. ITO an it is held that thedue date as specified in the section 139 ofthe IT Act, 1961 has to be as per section139(1) and not section 139(4) of the IT Act,1961. (viii) In view of the above discussion, it isheld that the appellant is not entitled fordeduction u/s 54B and 54F of the Act andthus the action of the AO in not allowingdeduction u/s 54B and 54F is justified andhence the additions made by the AO aresustained. (ix) In its submission, it was the contentionof the appellant that the AO disallowed theclaim to the extent of Rs.5,00,000/- bywrongly mentioning that this is in respect ofagricultural land for which assessee has already claimed deduction of Rs.1.60 Crore.It was stated that the amount of Rs.5 Lacwas incurred on wire fencing of theagriculture land acquired by the assessee andsmall room thereon and this is part of theagriculture land itself. Even otherwise if partof the amount of Rs.5,00,000/- is treated asincurred on house than in various cases ithas been held that wording used in sec. 54Fis “a residential house” which also permitsthe use of plural by virtue of sec. 13(2) ofGeneral Clauses Act and therefore where theassessee purchases more than one housethan also deduction is available. already claimed deduction of Rs.1.60 Crore.It was stated that the amount of Rs.5 Lacwas incurred on wire fencing of theagriculture land acquired by the assessee andsmall room thereon and this is part of theagriculture land itself. Even otherwise if partof the amount of Rs.5,00,000/- is treated asincurred on house than in various cases ithas been held that wording used in sec. 54Fis “a residential house” which also permitsthe use of plural by virtue of sec. 13(2) ofGeneral Clauses Act and therefore where theassessee purchases more than one housethan also deduction is available. (x) I have considered the above contention ofthe appellant very carefully. It has been heldabove that the deduction u/s 54F could no beallowed to the appellant and thus thiscontention became only academic. It isobserved from the valuation report filed bythe appellant that the total cost ofconstruction in the house property at PlotNo.480, New Dhani, Shanti Nagar, Near KarniMata Mandir, was estimated at Rs.47 Lac onlyand not Rs.52 Lac as claimed by theappellant for claiming deduction u/s 54F ofthe Act. The contention that Rs.5 Lac wasspent on wire fencing and construction ofroom on the agricultural land acquired byappellant does not hold good in the absenceof any documentary evidence in this regard.The appellant relied upon a number of caselaws for claiming deduction u/s 54F of theAct, if the appellant acquires more than oneresidential house. In this regard, it may bementioned here that if it is presumed thatthe appellant has constructed a room on theagricultural land even then it is not eligiblefor deduction u/s 54F of the Act on Rs.5 Lacas claimed by it as construction of a roomdoes not tantamount to a residential house.In order to be a residential house, the roommust be accompanied at least with kitchenand bathroom. In view of the above, thecontentions of the appellant are herebyrejected. Therefore, this ground of appeal ishereby rejected. 6.However, while considering the matter, hecontended that the tribunal has committedserious error in ignoring the observations madeby the Supreme Court in the case of P.N.Khanna vs. CIT, 266 ITR 1(SC) wherein it hasbeen held as under:- 12. As a result of the amendment of Section139(3) by the Taxation Laws (Amendmentand Miscellaneous Provisions) Act, 1986 thepower of the Income Tax Officer to extendtime for furnishing return was taken awayw.e.f. Ist April, 1987. 17. Two principles of construction - onerelating to casus omissus and the other inregard to reading the statute as a whole -appear to be well settled. Under the firstprinciple a casus omissus cannot be suppliedby the court except in the case of clearnecessity and when reason for it is found inthe four corners of the statute itself but atthe same time a casus omissus should not bereadily inferred and for that purpose all theparts of a statute or section must beconstrued together and every clause of asection should be construed with reference tothe context and other clauses thereof so thatthe construction to be put on a particularprovision makes a consistent enactment ofthe whole statute. This would be more so ifliteral construction of a particular clauseleads to manifestly absurd or anomalousresults which could not have been intendedby the legislature. "An intention to producean unreasonable result", said Danckwerts,L.J., in Artemiou v. Procopiou 1966 (1) QB876, "is not to be imputed to a statute ifthere is some other construction available".Where to apply words literally would "defeatthe obvious intention of the legislation andproduce a wholly unreasonable result", wemust "do some violence to the words" and soachieve that obvious intention and produce arational construction. (Per Lord Reid in Lukev. IRC {1963 AC 557} where at AC p.577 healso observed: "This is not a new problem,though our standard of drafting is such that itrarely emerges".) 20. Another plea which was urged with someamount of vehemence was that theprovisions of Section 276CC are applicableonly when there is discovery of the failureregarding evasion of tax. It was submittedthat since the return under Sub-section (4) ofSection 139 was filed before the discovery ofany evasion, the provision has no application.The case at hand cannot be covered by theexpression "in any other case". Thisargument though attractive has nosubstance. 7.He relied upon the judgment in the Sh.Nand Lal Sharma vs. The ITO, Bundi, ITA No. 413/JP/2012, wherein it has been heldas under :- 3.7 We have heard the rival contentions andperused the materials available on record.Apropos Ground No. 1 i.e. deposit of netconsideration into capital gain account schemeon 31-03-2009, we find merit in thearguments of the ld. AR that Section 54 refersto Section 139 for the time limit to acquireeligible new asset, which includes return u/s139(4) also i.e. time limit of one year from theend of assessment year. Various judicialprecedents cited above have taken this view;respectfully following them we hold thatassessee purchase of new residential house iseligible for claim of exemption u/s 54. Thusground no. 1 of the assessee is allowed. 8.He also relied upon the judgment of KeralaJudgment in Xavier J. Pulikkal vs. Dy. CIT,[2016] 242 Taxman 206 (KERHC), which hasbeen confirmed by the Supreme Court wherein ithas been held as under: 7. So far as the facts of the present case, wehave already stated above, it is possible thatfacts of the other appeal considered by theTribunal along with appeal of the Revenuemay be different. The scheme for depositingcapital gain is contemplated under section54F(4) and it depends upon when theproperty of the assessee is sold and whenexactly the amounts were invested, whetherit was invested in a residential house orotherwise. All these facts have to beconsidered with reference to provisions ofsection 54F(4) along with section 139(1) ofthe Act, as the due time would be undersection 139(1) only and not under section139(4) of the Act. 3. Looking at the facts, we modify theimpugned by directing that the AssessingOfficer shall consider the matter de novowithout being influenced by any observationmade by the High Court, in accordance withlaw. 9.He also relied upon the decision ofSupreme Court in Shriniwas Cable ComponentsVs. State of Madhya Pradesh and others (2012)10 SCC 421 wherein it has been held as under: “14.InG.P.CeramicsPrivateLimitedv.Commissioner, Trade Tax, Uttar Pradesh,(2009) 2 SCC 90,this Court has observed thus: "29. It is now a well-established principle oflaw that whereas eligibility criteria laid down inan exemption notification are required to beconstrued strictly, once it is found that theapplicant satisfies the same, the exemptionnotification should be construed liberally. [SeeCTT v. DSM Group of Industries (SCC para26);” 10.He has taken us to the provisions ofSection 54(2) of the Income Tax Act which readsas under: 9.He also relied upon the decision ofSupreme Court in Shriniwas Cable ComponentsVs. State of Madhya Pradesh and others (2012)10 SCC 421 wherein it has been held as under: “14.InG.P.CeramicsPrivateLimitedv.Commissioner, Trade Tax, Uttar Pradesh,(2009) 2 SCC 90,this Court has observed thus: "29. It is now a well-established principle oflaw that whereas eligibility criteria laid down inan exemption notification are required to beconstrued strictly, once it is found that theapplicant satisfies the same, the exemptionnotification should be construed liberally. [SeeCTT v. DSM Group of Industries (SCC para26);” 10.He has taken us to the provisions ofSection 54(2) of the Income Tax Act which readsas under: (2) The amount of the capital gain which is notappropriated by the assessee towards thepurchase of the new asset made within oneyear before the date on which the transfer ofthe original asset took place, or which is notutilised by him for the purchase orconstruction of the new asset before the dateof furnishing the return of incomeunder section 139, shall be deposited by himbefore furnishing such return [such depositbeing made in any case not later than the duedate applicable in the case of the assessee forfurnishing the return of income under sub-section (1) of section 139] in an account inany such bank or institution as may bespecified in, and utilised in accordance with,any scheme which the Central Governmentmay, by notification in the Official Gazette,frame in this behalf and such return shall beaccompanied by proof of such deposit; and, forthe purposes of sub-section (1), the amount, ifany, already utilised by the assessee for thepurchase or construction of the new assettogether with the amount so deposited shall bedeemed to be the cost of the new asset : Provided that if the amount deposited underthis sub-section is not utilised wholly or partlyfor the purchase or construction of the newasset within the period specified in sub-section(1), then,— (i) the amount not so utilised shall becharged under section 45 as the income of theprevious year in which the period of threeyears from the date of the transfer of theoriginal asset expires; and (ii) the assessee shall be entitled to withdrawsuch amount in accordance with the schemeaforesaid. 10.1 He also invited our attention to thefollowing provisions: 54B(2) (2) The amount of the capital gain which isnot utilised by the assessee for the purchaseof the new asset before the date of furnishingthe return of income under section 139, shallbe deposited by him before furnishing suchreturn [such deposit being made in any casenot later than the due date applicable in thecase of the assessee for furnishing the returnof income under sub-section (1) of section139] in an account in any such bank orinstitution as may be specified in, and utilisedin accordance with, any scheme which theCentral Government may, by notification inthe Official Gazette, frame in this behalf andsuch return shall be accompanied by proof ofsuch deposit; and, for the purposes of sub-section (1), the amount, if any, alreadyutilised by the assessee for the purchase ofthe new asset together with the amount sodeposited shall be deemed to be the cost ofthe new asset : Provided that if the amount depositedunder this sub-section is not utilisedwholly or partly for the purchase of thenew asset within the period specified insub-section (1), then,— (i) the amount not so utilised shall becharged under section 45 as the income ofthe previous year in which the period oftwo years from the date of the transfer ofthe original asset expires; and (ii) the assessee shall be entitled towithdraw such amount in accordance withthe scheme aforesaid. 54F(2) Provided that if the amount depositedunder this sub-section is not utilisedwholly or partly for the purchase of thenew asset within the period specified insub-section (1), then,— (i) the amount not so utilised shall becharged under section 45 as the income ofthe previous year in which the period oftwo years from the date of the transfer ofthe original asset expires; and (ii) the assessee shall be entitled towithdraw such amount in accordance withthe scheme aforesaid. 54F(2) (2) Where the assessee purchases, withinthe period of two years after the date ofthe transfer of the original asset, orconstructs, within the period of threeyears after such date, any residentialhouse, the income from which ischargeable under the head "Income fromhouse property", other than the newasset, the amount of capital gain arisingfrom the transfer of the original asset notcharged under section 45 on the basis ofthe cost of such new asset as provided inclause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed tobe income chargeable under the head"Capital gains" relating to long-termcapital assets of the previous year inwhich such residential house is purchasedor constructed. 10.2 He contended that from a bare perusal ofSection s 54B(2), it is clear that investment orthe benefit which he is seeking the investmentis to be made before return u/s 139(1) is filed.The language used by the legislature in 54B(2)is very clear “shall be deposited by him beforefurnishing such return not later than due date asapplicable in the case of assessee for furnishingof Income Tax under sub-section (1) of Section139 in an account in which such bank orinstitution as may be specified. 11.In that view of the matter, he contendedthat every word which has been used in subsection (2) is to be constructed very strictlyotherwise provision will be rendered nugatoryand interpretation which has been given by thetribunal will frustrate the object of the Section. 12.He also taken us to Section 54F(4) andcontended that it is the identical language whichhas been used in 54B(2) in that view of thematter, the judgment of Kerala High Court(supra) is required to be accepted and the viewtaken by the tribunal is required to be reversed. 13.He also contended that judgment ofGauhati High Court is required to be viewed veryseriously inasmuch as reproduction of subSection (2) of Section 54B is not causing breachof Section 139(1) which has been ignored by theGauhati High Court. 14.However, counsel for the respondent hascontended that the first judgment which soughtto be relied upon is prosecution case and whileconsidering the prosecution and the exemption,the court approach should be in a differentdirection than in case of prosecution which is tobe strictly construed whereas in the case ofexemption it is to be construed liberally. He hastaken us to the following findings recorded bythe Tribunal: 3.4 We have heard rival contentions, perusedthe material available on record and gonethrough the orders of the authorities below.The undisputed facts as recorded by the AOare that the assessee had sold two propertiesi.e. land situated at Ramsinghpura, Tehsil 14.However, counsel for the respondent hascontended that the first judgment which soughtto be relied upon is prosecution case and whileconsidering the prosecution and the exemption,the court approach should be in a differentdirection than in case of prosecution which is tobe strictly construed whereas in the case ofexemption it is to be construed liberally. He hastaken us to the following findings recorded bythe Tribunal: 3.4 We have heard rival contentions, perusedthe material available on record and gonethrough the orders of the authorities below.The undisputed facts as recorded by the AOare that the assessee had sold two propertiesi.e. land situated at Ramsinghpura, Tehsil Sanganer, Khasra Nos. 165 & 166,admeasuring 0.82 Hectare on 28.12.2010 toM/s. Krishna Balaram Residency Pvt. Ltd.Jaipur jointly both his brother Shri Sedhu Ramat the consideration of Rs.3,00,00,000/- andland situated at Ramsinghpura (Dholai), TehsilSanganer, Khasra No. 163, admeasuring 0.70Hectare on 09.02.2011 to M/s. Krishna BalramResidency Pvt. Ltd., Jaipur jointly with hisbrother Shri Sedhu Ram and shown totalconsideration of Rs.2,56,78,800/-. Theassessee shown long term capital gain ofRs.64,61,650/- after caiming deduction u/s54B at Rs. 1,60,00,000/- and u/s 54FRs.52,00,000/-. The AO observed that theassessee has failed to deposit the amount ofnet sale consideration or capital gain in capitalgain account before the due date of filing ofreturn i.e. 31.07.2011. It was observed thatthe assessee claimed that the entire saleconsiderationwas deposited in theNationalized Bank as well as in capital gainaccount. However, no documentary evidencewas submitted to the AO. Therefore, the AOdeclined the claim of deduction under section54F and similarly the claim u/s 54F of the Act. 3.5 It is contended by the assessee that sincethe investment is made before the due date offiling of return under section 139(4) of the Actand also before the date of filing of return on21.02.2013, the assessee is eligible fordeduction u/s 54B & 54F even if he has notdeposited the amount in capital gain account.In support of his contention, ld. Counsel forthe assessee has placed reliance on thedecision of Coordinate Bench rendered in thecase of Nandlal Sharma Vs. ITO (2015) 122DTR 404 (JPR) (Trib.), Ashok Kapasiwala vs.ITO (2015) 45 CCH 407 (Ah.)(Trib.) and thejudgments of Hon’ble Punjab & haryana HighCourt rendered in the case of CIT vs. JagtarSingh Chawla (2013) 87 DTR 217 (P&H)(HC),CIT vs. Ms. Jagriti Aggarwal (2011) 64 DTR333 (P&H)(HC) and on the judgments ofHon’ble Karnataka High Court in the ase ofFathima Bai vs. ITO (2009) 32 DTR 243 (Kar.)(HC) and in the case of CIT vs. Smt. Vrinda P.Issac (2011) 64 DTR 376 (Kar.)(HC) and alsodecision of Coordinate Bench rendered in thecase of Nipun Mehrotra vs. ACIT (2008) 110ITD 520 (Bang.)(Trib.) 3.6 The Coordinate Bench of the Tribunal whiledeciding the identical issue in the case of NandLal Sharma vs. ITO (supra) has taken intoconsideration the various judgments of Hon’bleHigh Courts referred above. Therefore,respectfully following the decision of Coordinate Benches of the Tribunal (supra), weallow the claim of the assessee. The order ofld. CIT (A) is set aside. 15.He has relied upon the following decisions: The Commissioner of Income Tax, Rohtakvs. Shri Jagtar Singh Chawla, (2013) 259CTR 0388 (PHHC) : 8. A Division Bench of the Gauhati High Courtin a case reported as Commissioner of IncomeTax v. Rajesh Kumar Jalan : (2006) 286 ITR274, held that only Section 139 of the Act ismentioned in Section 54(2) of the Act in thecontext that the unutilized portion of thecapital gain on the sale of property used forresidence should be deposited before the dateof furnishing the return of the Income Taxunder Section 139 of the Act and that it wouldinclude extended period to file return in termsof Sub Section 4 of Section 139 of the Act. Itwas held as under:- 15.He has relied upon the following decisions: The Commissioner of Income Tax, Rohtakvs. Shri Jagtar Singh Chawla, (2013) 259CTR 0388 (PHHC) : 8. A Division Bench of the Gauhati High Courtin a case reported as Commissioner of IncomeTax v. Rajesh Kumar Jalan : (2006) 286 ITR274, held that only Section 139 of the Act ismentioned in Section 54(2) of the Act in thecontext that the unutilized portion of thecapital gain on the sale of property used forresidence should be deposited before the dateof furnishing the return of the Income Taxunder Section 139 of the Act and that it wouldinclude extended period to file return in termsof Sub Section 4 of Section 139 of the Act. Itwas held as under:- From a plain reading of sub-section (2) ofSection 54 of the Income-tax Act, 1961, it isclear that only section 139 of the Income-taxAct, 1961, is mentioned in section 54(2) in thecontext that the unutilized portion of thecapital gain on the sale of property used forresidence should be deposited before the dateof furnishing the return of the Income-taxunder section 139 of the Income-tax Act.Section 139 of the Income-tax Act, 1961,cannot be meant only section 139(1), but itmeans all sub-sections of section 139 of theIncome-tax Act, 1961. Under sub-section (4)of section 139 of the Income-tax Act anyperson who has not furnished a return withinthe time allowed to him under sub-section (1)of Section 142 may furnish the return for anyprevious year at any time before the expiry ofone year from the end of the relevantassessment year or before the completion ofthe assessment year whichever is earlier.9. The said judgment was relied upon by aDivision Bench of the Karnataka High Court inFathima Bai v. ITO, ITA No. 435 of 2004Decided on 17th October 2008, wherein it washeldtothefollowingeffect:- 11. The extended due date under section139(4) would be 31.3.1990. The assessee didnot file the return within the extended duedate, but filed the return on 27.2.2000.However, the assessee had utilized the entirecapital gains by purchase of a house propertywithin the stipulated period of section 54(2) i.e., before the extended due date for returnunder section 139. the assessee technicallymay have defaulted in not filing the returnunder section 139(4). But, however, utilizedthe capital gains for purchase of propertybefore the extended due date under section139(4). The contention of the revenue that thedeposit in the scheme should have been madebefore the initial due date and not theextended due date is an untenable contention.10. A Division Bench of this Court in which oneof us (Hemant Gupta, J.) was a member, hadan occasion to consider the provisions ofSection 54(2) of the Act, wherein it has beenheld that sub-section(4) of Section 139 of theAct is in fact a proviso to Section 139(1) of theAct. Therefore, since the assessee hasinvested the sale proceeds in a residentialhouse within the extended period of limitation,the capital gain is not payable. The judgmentsin Rajesh Kumar Jalan's case and Fathima Bai'scase (supra) were referred to. It has been heldas under:- Having heard learned counsel for the parties,we are of the opinion that sub-section (4) ofSection 139 of the Act is, in act, a proviso tosub-section (1) of Section 139 of the Act.Section 139 of the Act fixes the different datesfor filing the returns for different assesses. Inthe case of assessee as the respondent, it is31st day of July, of the Assessment Year interms of clause (c) of the Explanation 2 tosub-section 1 of Section 139 of the Act,whereas sub-section (4) of Section 139provides for extension in period of due date incertain circumstances. It reads as under:- Having heard learned counsel for the parties,we are of the opinion that sub-section (4) ofSection 139 of the Act is, in act, a proviso tosub-section (1) of Section 139 of the Act.Section 139 of the Act fixes the different datesfor filing the returns for different assesses. Inthe case of assessee as the respondent, it is31st day of July, of the Assessment Year interms of clause (c) of the Explanation 2 tosub-section 1 of Section 139 of the Act,whereas sub-section (4) of Section 139provides for extension in period of due date incertain circumstances. It reads as under:- (4) Any person who has not furnished a returnwithin the time allowed to him under sub-section (1), or within the time allowed under anotice issued under subsection (1) of Section142, may furnish the return for any previousyear at any time before the expiry of one yearfrom the end of the relevant assessment yearor before the completion of the assessmentwhicheverisearlier; Provided that where the return relates to aprevious year relevant to the assessment yearcommencing on the 1st day of April, 1988, orany earlier assessment year, the reference toone year aforesaid shall be construed as areference to two years from the end of therelevantassessmentyear. A reading of the aforesaid sub-section wouldshow that if a person has not furnished the return of the previous year within the timeallowed under sub-section (1) i.e. before 31stday of July of the Assessment Year, theassessee can file return before the expiry ofone year from the end of ever relevantAssessment Year. 3. Fathima Bai vs. ITO, (2009) 32 DTR0243 (KARHC), it has been held as under :- 8. The section 54(2) declares that within oneyear from the date of transfer if the capitalgain is not invested in purchase of building, heshould deposit the amount in the Capital GainAccount Scheme or else the assessee shouldinvest the capital gains before filing of returnwithin the permitted period under section 139.In which event, the assessee will not be liableto pay capital gain tax. 9. The section 139(4) declares that theassessee should file returns within the timeprescribed, if he fails to file returns, he mayfile returns for any previous year at any timebefore expiry of one year from the end ofrelevant assessment year. 4. Commissioner of Income Tax-II,Chandigarh vs. Ms. Jagriti Aggarwal,(2011) 339 ITR 0610 (PHHC), it has beenheld as under : 6. Section 54 of the Act contemplates that thecapital gain arises from the transfer of a longterm capital asset, but if the assessee within aperiod of one year before or two years after thedate on which the transfer took place purchasesresidential house, then instead of the capitalgain, the income would be charged in terms ofprovisions of Sub Section (1) of Section 54. Asper Sub-Section (2), if the amount of capitalgains is not appropriated by the assesseetowards the purchase of new asset within oneyear before the date on which the transfer ofthe original asset took place, or which is notutilized by him for the purchase or constructionof the new asset before the date of furnishingthe return of income under Section 139, theamount shall be deposited by him beforefurnishing such return not later than due dateapplicable in the case of assessee for furnishingthe return of income under Sub Section (1) ofSection 139 in an account in any such Bank orinstitution as may be specified. Relevant Sub-Section (2) of Section 54 of the Act reads asunder: (2) The amount of the capital gain which is notappropriated by the assessee towards thepurchase of the new asset made within one year (2) The amount of the capital gain which is notappropriated by the assessee towards thepurchase of the new asset made within one year before the date on which the transfer of theoriginal asset took place, or which is not utilizedby him for the purchase or construction of thenew asset before the date of furnishing thereturn of income under Section 139, shall bedeposited by him before furnishing such returnsuch deposit being made in any case not laterthan the due date applicable in the case of theassessee for furnishing the return of incomeunder Sub-Section (1) of Section 139 in anaccount in any such bank or institution as maybe specified in, and utilized in accordance with,any scheme which the Central Government may,by notification in the Official Gazettee, frame inthis behalf and such return shall beaccompanied by proof of such deposit, and forthe purposes of Sub-Section (1), the amount, ifany, already utilized by the assessee for thepurchase or construction of the new assettogether with the amount so deposited shall bedeemed to be the cost of the new asset: Provided that if the amount deposited under thisSub-Section is not utilized wholly or partly forthe purchase or construction of the new assetwithin the period specified in Sub-Section (1),then,- (i) The amount not so utilized shall be chargedunder Section 45 as the income of the previousyear in which the period of three years from thedate of the transfer of the original asset expires;and (ii) The assessee shall be entitled to withdrawsuch amount in accordance with the schemeaforesaid. 11. A reading of the aforesaid Sub-Sectionwould show that if a person has not furnishedthe return of the previous year within the timeallowed under Sub-Section (1) i.e. before 31stday of July of the Assessment Year, the assesseecan file return before the expiry of one yearfrom the end of the relevant Assessment Year. 13. In view of the above, we find that due datefor furnishing the return of income as perSection 139(1) of the Act is subject to theextended period provided under Sub-Section (4)of Section 139 of the Act. Consequently, thequestion of law is answered against the Revenueand in favour of the assessee. Thus, the presentappeal is dismissed. 5. In CIT vs. Vrinda P. Issac, (2011) 64 DTR0376 (KARHC), it has been held as under :- 3. The Tribunal in coming to the said conclusionthat the investment made by the assessee beingwithin the time specified under sub-section 4 ofsection 139 of the Act relied on the judgment of this court in the case of Fathima Bai v. ITO :(2009) 32 DTR (Kar) 243. Even if two views arepossible, the revisional authority had nojurisdiction to initiate proceedings under section263 of the Act. It was held that the orderpassed by the High Court is incorrect, whichdecision cannot be accepted. The Tribunal hasfollowed the judgment of this Court as thedecision of the High Court is binding on thesubordinate Courts. If the judgment passed bythis Court is erroneous, the revenue shouldhave challenged the said order. At any rate thatcannot be a ground for invoking section 263 ofthe Act in the facts of this case. In that view ofthe matter, we do not see any merit in thisappeal. Accordingly, no substantial question oflaw arises for consideration. Hence, the appealis dismissed. 6. Commissioner of Income Tax vs. RajeshKumar Jalan, (2006) 286 ITR 0274(GUHC), it has been held as under :- 6. Commissioner of Income Tax vs. RajeshKumar Jalan, (2006) 286 ITR 0274(GUHC), it has been held as under :- 6. From a plain reading of Sub-section (2) ofSection 54 of the Income Tax Act, 1961, it isclear that only Section 139 of the Income TaxAct, 1961, is mentioned in Section 54(2) in thecontext that the unutilised portion of the capitalgain on the sale of property used for residenceshould be deposited before the date offurnishing the return of the Income Tax underSection 139 of the Income Tax Act. Section 139of the Income Tax Act, 1961, cannot be meantonly Section 139(1) but it means all sub-sections of Section 139 of the Income Tax Act,1961. Under Sub-section (4) of Section 139 ofthe Income Tax Act any person who has notfurnished a return within the time allowed tohim under Sub-section (1) of Section 142 mayfurnish the return for any previous year at anytime before the expiry of one year from the endof the relevant assessment year or before thecompletion of the assessment year whichever isearlier. Such being the situation, it is the caseof the respondent/assessee that therespondent/assesseecouldfulfiltherequirement under Section 54 of the IncomeTax Act for exemption of the capital gain frombeing charged to Income Tax on the sale ofproperty used for residence up to March 30,1998, inasmuch as the return of Income Tax forthe assessment year 1997-98 could befurnished before the expiry of one year fromthe end of the relevant assessment year orbefore the completion of the assessmentwhichever is earlier under Sub-section (4) ofSection 139 of the Income Tax Act, 1961. 7. I.T.C. Ltd. vs. Commissioner of CentralExcise, New Delhi and Anr. (2004) 7 SCC591 (SC), it has been held as under :- 23. Presumably the phrase "badly drafted" wasused to mean that the language of the Entrywas ambiguous. In case of such ambiguity'close reasoning' will be employed - butwithout stretching the language to arrive atthe only reasonable construction. Thesedecisions exemplify the general rule ofstatutory construction that words have to beconstrued strictly according to their ordinaryand natural meaning, particularly when thestatute is a fiscal one irrespective of the objectwith which the provision was introduced. Ofcourse if there is ambiguity in the statutorylanguage, reference may be made to thelegislative intent to resolve the ambiguity. Butif the statutory language is unambiguous thenthat must be given effect to. The legislature isdeemed to intend and mean what it says Theneed for interpretation arises only when thewords used in the statute are, on their ownterms ambivalent and do not manifest theintention of the legislature Keshavji Ravji andCo. and Ors. V. Commissioner of Income Tax :[1990]183ITR1(SC) . 25. But there are exceptions to this rule. Thefirst is that the rule of strict construction doesnot apply to a provision which merely laysdown the machinery for the calculation orprocedure for the collection of tax. 27. The second exception is: If twoconstructions are possible and a strictconstruction would lead to an absurd resultthen the construction which is in keeping withthe object of the statutory provision or inkeeping with equity could be accepted. Thiswas the view expressed in Commissioner ofIncome Tax. v. J.H. Gotla, Yadagiri whileinterpreting section 24(2) of the Income TaxAct, 1922: 25. But there are exceptions to this rule. Thefirst is that the rule of strict construction doesnot apply to a provision which merely laysdown the machinery for the calculation orprocedure for the collection of tax. 27. The second exception is: If twoconstructions are possible and a strictconstruction would lead to an absurd resultthen the construction which is in keeping withthe object of the statutory provision or inkeeping with equity could be accepted. Thiswas the view expressed in Commissioner ofIncome Tax. v. J.H. Gotla, Yadagiri whileinterpreting section 24(2) of the Income TaxAct, 1922: "...if strict literal construction leads to anabsurd result i.e. result not intended to besubserved by the object of the legislationfound in the manner indicated before, and ifanother construction is possible apart fromstrict literal construction then that constructionshould be preferred to the strict literalconstruction. Though equity and taxation areoften strangers, attempts should be made thatthese do not mean always so and if aconstruction results in equity rather than ininjustice; then such construction should bepreferred to the literal construction." 8. The Commissioner of Income Tax, Madrasvs. T.V. Sundram Iyengar (P) Ltd. (1976) 1SCC 77 (SC), it has been held as under :- 21. In considering whether the company isliable to pay additional super-tax on the entirebalance of distributable profits, it has to beborne